New Indonesian Environmental Law : New Challenge for Mining Industry

On October 2009, President Yudhoyono ratified Law of The Republic Indonesia Number 32 Year 2009 Regarding Environmental Protection and Management. Different from the previous environment law (Law No. 23 Year 1997), the new law regulate more detail about Environmental Impact Assesment (AMDAL) and put renewable and unrenewable resources exploitation into kind of activity mandatory to be covered by AMDAL document. This law also stated the requirement of possessing environmental permit before an industry starting its activity.

The new requlation off course will impact mining industry, especially in the initial stage of the mine projects, as well as the development projects. Companies will have to spend more time and money to fulfilled these arrangement before started their projects.

Environmental Impact Assesment (AMDAL)

In the new law, AMDAL is required for every bussiness or acivity which have substantial impact to the environment. Generic criteria for substantial affecting bussines or actitiy is mentioned in the article 22 of the law. Among those criterias, some of them are pointed that mining activity is obliged to have AMDAL, i.e, :
1. change in form of land and landscape
2. exploitation of natural resources, renewable and unrenewable
3. process and activity to cause environmental pollution and/or damage as well a squandering and degradation of natural resources in the utilization
4. process and activity whose output would influence the preservation of the natural resource conservation area and/or protection of cultural resource reserve (for mining companies awarded concession that occupy protected forest area)

This AMDAL must also be made by person who is certified as AMDAL formulator or known as AMDAL-B certicate, and will be judged by AMDAL Appraisal Commision established by the Minister, Governors or regents/mayors in accordance with their respective scope of authority.

Not as tight and detaill as Law No 32 Year 2009 which strictly noted that exploitation of natural resource mandatory to have AMDAL, the previous Law no. 23 Year 1997 only mentioned “every business and/or activity may bringing substantial impact to the environment obliged to have AMDAL”. Previously, specific criterias of acitivity required to have AMDAL are stated in Minister of Environment Regulation No. 11 Year 2006 (Permen LH No 11 tahun 2006). In this ministerial regulation, not all of mining activities are mandatory to have AMDAL. Mining activities obliged to have AMDAL in that Ministerial Regulation for instance are:
1. Open area more than 50 ha (cumulative per annum)
2. For coal mining :
– mine capacity exceeding 1,000,000 tons per annum
– overburden removed exceeding 4,000,000 tons per annum
3. For Primary Ore :
– mine capacity exceeding 400,000 tons per annum
– overburden removed exceeding 1,000,000 tons per annum
4. For Secondary Ore/Alluvial deposit :
– mine capacity exceeding 300,000 tons per annum
– overburden removed exceeding 1,000,000 tons per annum
5. etc…

However, the criteria listed in the new environmental law is still generic criteria. Indonesian government has not published the technical rule straightening up the specific criteria yet. Untill the new specific criteria has published, criteria in Ministerof Environment Regulation No. 11 Year 2006 is considered to be valid.

Other activity excluded from the AMDAL compulsory criteria shall be obliged to have “Environmental Management Program and Environmental Monitoring Program” or also called as “UKL-UPL”

UKL-UPL is also kind of environmental document but much less detil than AMDAL. This document not required to be appraised by ad hoc commission as AMDAL does, but enough to be appraised by structural or technical unit within institution responsible for environmental management in regencial or provincial level.

For exploration stage, usually UKL-UPL is sufficient to cover the required environmental document, as long as the exploration activity not open the vegetation more than 50 hectares and/or in protected forest. But, this document may not be adequate for exploitation stage.

Environmental Pemit

Previously, AMDAL or UKL-UPL is considered to be sufficient environmental permit after being approved by authorities. On the contrary, the new environmental law affirm that those environmental documents are not suffice to act as environmental permit. Article 36 in Law No 32 Year 2009 explain that every bussines and/or activity required to have AMDAL or UKL-UPL shall obliged to have environmental permit issued by the Minister, Governor or Regent/mayor in accordance with their respective scope of authority. Appearance of this new permitting procedure of course will effect the permitting paradigm in mining industry, as they will spend more time and budget for their projects permitting process. However, government has not published yet the regulation that arrange the detail technical procedure of the permitting process. Up to now, AMDAL or UKL-UPL is still considered to be valid environmental permit.

Sanction and Penal Provision

Sanctions for violation to this new environmental law is distinguished into two types, i.e, administrative sanction and penal provision. Admistrative sanction can be written warning, government compulsion, freezing of environmental license and revocation for environmental license. While, penal provison is given for :
1. anybody creating environmetal damage,
2. anybody running business or activity without environmental permit
3. anybody formulating AMDAL without compentency certificate of AMDAL formulator
4. government officials granting environmental permit that is issue environmental permit without AMDAL or UKL-UPL
5. every authorized official intentionally not supervising compliance of parties responsible for business and/or activity with legislation and environmental permit
6. etc

Penal provision for these violations is improsenment for 1 untill 3 years or fine varying from five hudred million to three billions rupiahs.

Source :

1. Law of Republic Indonesia No 23 Year 1997 Regarding Environmental Management
2. Law of Republic Indonesia No 32 Year 2009 Regarding Environmental Protection and Management
3. Minister of Environment Regulation No 11 Year 2006 Regarding Type of Bussiness and/or Activity Plan Required to Have Environmental Impact Assesment (AMDAL)
4. Minister of Environment Decree No 86 Year 2002 Regarding Guidelines of Environmental Management Program and Environmental Monitoring Program (UKL-UPL)